Last May’s tornado in north Minneapolis may have accelerated the redevelopment already occurring at Penn Avenue North and West Broadway Avenue — a blighted area that officials hope could someday become like 50th and France or other key Minneapolis retail hubs.

Penn & Broadway: The next 50th & France?

The north Minneapolis tornado in May shut down fast food joint Fire ’n’ Ice. Now the building’s owner, Dean Rose of the Broadway Liquor Outlet, and developer Steve Minn and his Lupe Development Partners see the potential for a roughly $15 million mixed-use development. (Staff photo: Bill Klotz)

Developer Steve Minn, retailer dream big after May tornado

Last May’s tornado in north Minneapolis may have accelerated the redevelopment already occurring at Penn Avenue North and West Broadway Avenue — a blighted area that officials hope could someday become like 50th and France or other key Minneapolis retail hubs.

Businesses that shut down because of tornado damage included the Broadway Liquor Outlet at 2201 W. Broadway Ave. and the fast food joint Fire ’n’ Ice, which was run out of a former Burger King at 2220 W. Broadway.

Broadway Liquor’s owner Dean Rose also owned the 2220 building. Rather than try to rehab 2201, he decided to seek a mixed-use development around 2220, where Broadway Liquor could eventually reopen.

Nearly a year later, Rose has formed a business partnership with developer Steve Minn and his Lupe Development Partners. The resulting plans call for a roughly $15 million project with retail and 75 apartments covering several properties.

Much of the financing will come from government sources; the intersection is in an area of the city that local officials have deemed blighted because of damaged and abandoned properties.

West Broadway Avenue is the western border of the Jordan neighborhood, which saw its population decline nearly 20 percent in the past decade. Median household income in the neighborhood from 2005 to 2009 was $30,280, compared with $45,625 for Minneapolis as a whole, according to Wilder Research data cited by the city.

The Lupe/Rose project has faced some hurdles because Keith Reitman, a major owner of rental housing and other properties in the area, has held off selling a building in the development area, even saying he might want to engage in his own development.

Rose, a third-generation liquor store owner in the neighborhood, says the tornado created a “unique opportunity to expand our concept beyond just our store; to look at how we redevelop Penn and Broadway from the mass devastation that happened from the tornado.”

“This is the result of the tornado,” Tom Streitz, the city of Minneapolis housing director, said of the Lupe/Rose project. “It’s an opportunity to redevelop.”

Streitz said the intersection’s potential for the neighborhood is comparable to other retail hubs in the city: 50th Street and France Avenue, or Lake Street and Lyndale Avenue.

The project, which could break ground as soon as this year, is happening around the same time as CommonBond Communities plans for a $9.8 million, 50-unit apartment building at 2022 W. Broadway Ave. Local projects completed in recent years include the $3 million5 Points building at 2119 W. Broadway Ave., which involved developer Stuart Ackerberg, and the $750,000 Capri Theater renovation at 2027 W. Broadway.

The Penn and Broadway intersection is also part of a 38-block area in which the city is looking to acquire 42 homes for redevelopment as part of the Penn Avenue North Redevelopment Plan.

Both the Lupe/Rose and CommonBond developments are expected to draw much of their funding from housing revenue bonds allocated by the city, as well as grants and loans from local and state agencies. Requirements for the government funding mean the housing will be for a working-class population — people making 60 percent of the median income in the area, or about $30,000 to $50,000 a year.

“Those are your teachers, police officers, nonprofit workers, etc. — a huge part of the workforce,” said Erin Jerabek, executive director of the West Broadway Business & Area Coalition. She thinks the Lupe/Rose and CommonBond developments will meet a strong need for affordable housing post-tornado. In the case of Lupe/Rose, there could also be needed retail.

Streitz said the rental housing vacancy rate in the city is 1.5 percent — a historical low — and the demand for affordable rental housing is “very high.” He said units in the Lupe/Rose and CommonBond developments will likely run at $850 to $900 per month for one-bedrooms and around $1,100 for two-bedroom units.

For now, the Lupe/Rose project is still in its early stages of planning, with no architect or general contractor selected yet, Minn said.

Besides the 2220 W. Broadway Ave. property, Lupe and Rose want to acquire two vacant rental housing buildings owned by the city at 2423 and 2413 Penn Ave. N. The Minneapolis City Council’s Community Planning and Economic Development Committee on Tuesday approved development rights for the parcels, an initial step toward a purchase.

The committee also heard objections from Reitman, who owns a vacant commercial building at 2419 Penn, right in the middle of where Lupe and Rose want to build.

Lupe and Rose have been trying to buy the building from Reitman, who says he instead wants to spend a few hundred thousand dollars of his own cash to renovate.

“I’d like to do a development with my money and my building. … Now it’s go time, and why should I be left in the dirt when I have a lovely building?” Reitman told the committee.

Minn told the council committee he doesn’t need Reitman’s building anymore. He said he has a preliminary agreement with the Church of St. Anne-St. Joseph Hien to buy a parcel at 2512 Queen Ave. N., which would give Lupe and Rose room to build around Reitman.

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“Streitz said the rental housing vacancy rate in the city is 1.5 percent — a historical low — and the demand for affordable rental housing is “very high.” He said units in the Lupe/Rose and CommonBond developments will likely run at $850 to $900 per month for one-bedrooms and around $1,100 for two-bedroom units.” Well that doesn’t sound too affordable to me when a rent of $757 is 30 percent to the area’s median income. But Minn has never been one to support affordable housing anyway.